India will lose Rs. 35,000 crore of net tax revenue after the Union Budget tweaked direct and indirect taxes to provide relief to the middle-income group, Finance Minister Nirmala Sitharaman said today.
“Revenue of about Rs. 38,000 crore – Rs. 37,000 crore in direct taxes and Rs. 1,000 crore in indirect taxes – will be forgone while revenue of about Rs. 3,000 crore will be additionally mobilized. Thus, the total revenue forgone is about Rs. 35,000 crore annually,” Sitharaman said while announcing the Union Budget for the next fiscal year that starts April 1.”
In a major announcement, Finance Minister Nirmala Sitharaman announced that the new tax regime will now be the default tax regime, but citizens can still avail of benefits under old tax regime on opt-out basis.
Revised tax slabs under the new tax regime
- Under new tax regime, income of Rs 0-3 lakh is nil.
- Income above Rs 3 lakh and up to Rs 6 lakh to be taxed at 5% under new regime.
- Income of above Rs 6 lakh and up to Rs 9 lakh to be taxed at 10% under new regime.
- Income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20% under new regime.
- Income above Rs 15 lakh to be taxed at Rs 30%.
FM announced changes in certain duties and taxes, resulting in some items getting cheaper and some getting costlier.
Here’s a list of imported items that will become costlier:
Imported bicycles and toys
Fully imported cars and Electric Vehicles
However, certain goods will become cheaper as the government has slashed the customs duty and these are:
Domestically-manufactured TV sets
Fish lipid oil used in manufacturing aquatic feed
Seeds for lab-grown diamonds
Machinery for manufacturing lithium ion cell to be used in electric vehicles.
- FY-2024 fiscal deficit target at 5.9% of GDP
- Outlay for capital spending increased 33% to 10 trillion rupees in 2023/24
- Cigarettes to get costlier as Budget proposes 16% hike in duty
- To set up agriculture accelerator fund
- Increases budget allocations to 790 bln rupees for affordable housing in 2023/24
- Finance Minister says increase in public capex key to crowding in private investments
- Indian economy has become the fifth-largest economy in the world in last nine years
- Budget adopts seven priorities including inclusive, green growth
- Agricultural credit target raised to 20 trillion rupees ($244.42 billion) for 2023/24
- Sitharaman says the economy is growing the fastest among major economies
FM Nirmala Sitharaman also outlined seven priorities for the ‘first Budget in Amrit Kaal’
- Inclusive development
- Reaching the last mile
- Infra & investment
- Unleashing the potential
- Green growth
- Youth power
- Financial sector
“The Indian economy is on the right track, heading to a bright future. Our focus on reforms and sound policies resulting in Jan Bhagidari helped us in trying times, our rising global profile is due to several accomplishments,” FM said.
She added, “It would also be the first normal budget after the Covid pandemic and amid a global slowdown. The priority for Budget 2023 is thus expected to be to maintain a reasonably high but stable growth in the medium term. Alongside, to establish fiscal credibility with a suitable incremental reduction in the fiscal deficit to GDP ratio.”
Budget announcements 2023:
Capital investment outlay being increased by 33% to Rs 10 lakh crores, which would be 3.3% of GDP: FM Sitharaman
An agriculture accelerator fund to encourage agritech startups by young entrepreneurs in rural areas. Fund will focus on bringing innovative solutions for challenges faced by farmers.
The government will launch the Atmanirbhar Clean Plant Programme to improve availability of disease-free quality planting material for high-value horticultural crops at an outlay of Rs 2,200 crore.
PM Vishwa Karma Kaushal Samman – package of assistance for traditional artisans and craftspeople has been conceptualized, will enable them to improve the quality, scale and reach of their products, integrating with MSME value chain.